Trump (Section 530A) Accounts Officially Launch
July 4, 2026 is the expected official launch date for contributions to Trump accounts (aka Section 530A accounts). We originally wrote about the accounts here. While there are many different investment vehicle choices for individuals (most outlined in our article), a Section 530A may make sense as a wealth transfer tool for high net worth individuals with children or other dependents under age 18. If contributions are maximized every year, once the child is no longer a dependent and files their own tax return, it might make sense to convert the entire account to their Roth IRA and pay tax (but no penalty) on just the earnings to date at their (presumably) lower tax rate. This may not make sense while they are still claimed as a dependent due to the kiddie tax.
Safe Harbor for Trump Account Gifts
When Trump accounts were originally announced, tax professionals scratched their heads a little as these contributions are clearly not present interest gifts that qualify for the annual exclusion gift exemption of $19,000 per year per person. Unless addressed, this would mean that anyone contributing to a Trump account would need to file a gift tax return to report the gift. On June 30, 2026, the IRS issued safe harbor guidance that means gift tax returns will not be required for most of these contributions. The safe harbor applies if the donor’s total gifts to the beneficiary do not exceed the annual exclusion ($19,000 in 2026), the contribution creates no gift or generation-skipping transfer (GST) tax liability, and no gift tax return is otherwise required for the year. If all requirements are met, contributions made by individual donors to Trump accounts will not be subject to gift tax reporting requirements for that year. Importantly, if you are filing a gift tax return to report other gifts, all gifts, including those to Trump accounts, will need to be included on the return.
Revised 1099-R
Form 1099-R was revised recently to report distributions from Trump accounts. Important to note – there is a 100% tax on earnings from excess contributions to accounts. If you plan on contributing to these types of accounts, work closely with your tax preparer to coordinate contributions with other donors to avoid any overcontribution.
Taxes and financial planning are complex, but you don’t have to navigate them alone. A financial advisor can help you stay informed about tax law changes, optimize your savings and investments, and avoid costly mistakes. If you need tailored guidance, our team is here to help. Talk to an advisor or call (603) 589-8010 to integrate tax planning into your comprehensive financial strategy.
Disclaimer: This is not to be considered investment, tax, or financial advice. Please review your personal situation with your tax and/or financial advisor. Milestone Financial Planning, LLC (Milestone) is a fee-only financial planning firm and registered investment advisor in Bedford, NH. Milestone works with clients on a long-term, ongoing basis. Our fees are based on the assets that we manage and may include an annual financial planning subscription fee. Clients receive financial planning, tax planning, retirement planning, and investment management services and have unlimited access to our advisors. We receive no commissions or referral fees. We put our client’s interests first. If you need assistance with your investments or financial planning, please reach out to one of our fee-only advisors. Advisory services are only offered to clients or prospective clients where Milestone and its representatives are properly licensed or exempt from licensure. Past performance shown is not indicative of future results, which could differ substantially.
